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Long-Term Cryptocurrency Analysis: Break-Down or Reversal Ahead?

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From a long-term technical perspective, not much has changed in the cryptocurrency segment in the past few weeks, with only Bitcoin’s rally providing bulls something to cheer about. The bearish trend that has been dominant for months is still intact in most cases, and despite the several rally attempts, sellers always returned strong, pushing the major coins back towards the key support levels that have been tested in recent months.

The total value of the market has been stuck below $300 billion, with the exception of a few brief spikes, while capital flows were negative almost all year. In spite of the clear segment-wide selling pressure, the most important coins are still holding up above key support, and BTC’s current relative strength is a possible game-changer for the coming weeks. Should the top coins follow the relatively weaker ones, such as LTC and XMR below long-term support, a longer structural bear market could commence.

BTC/USD, Daily Chart Analysis

For now, BTC is safely above the structurally important $5850 level, and the coin broke out of the declining trend during the recent surge. That said, given the widespread selling pressure in the market, a trend change is not yet confirmed and traders shouldn’t enter full positions here, while investors should still hold on to their coins.

In the case of a breakdown below $5850, the next major support is found at $5000, while a recovery above $8400 would confirm a new uptrend. In the current broad trading range, the $7650-$7800 zone is the most important with other levels of interest at $7350, $7000, $6750, and $6250.

ETH/USD, Daily Chart Analysis

Ethereum has been showing short-term weakness compared to Bitcoin despite the fact that that the April lows are still well below the current price level. The downtrend in the coin is clearly intact, and a test of the 4360 level is now very likely, even if a bullish reversal is ahead. The long-term trend signal is neutral for ETH, while short-term the coin is on a clear sell signal. Support above the April low is found at $400 and $380, while strong resistance is ahead at $450, $500 and between $555 and $575.

Litecoin

LTC/USD, 4-Hour Chart Analysis

Litecoin continues to lead the way lower, being stuck in a long-term downtrend after failing to rally durably above the $90 support/resistance level. The $75 support is currently in focus again, and a move below that is likely, given the strong downtrend. Traders and investors shouldn’t enter new positions, with further strong resistance ahead at $100 and support found near $64-$65.

Dash

DASH/USD, 4-Hour Chart Analysis

Dash is also weak on all time-frames, trading on a new cycle low already, below the $215 support. The coin bounced back as far as $300 during the consolidation phase, but as the break-out above resistance failed, the strong downtrend remains intact. Primary support is now found at $200, while resistance is ahead at $265, near $300, and at $360.

Ripple

XRP/USD, 4-Hour Chart Analysis

Ripple experienced a hectic consolidation period, but as selling pressure remained apparent, all rally attempts failed. The coin is barely holding up above the structurally important support level near $0.42, while trading has been centered around the $0.45 level for weeks Above that, strong resistance is ahead at $0.51, $0.54, and $0.64, while the next major support zone is found between $0.30 and $0.32.

Ethereum Classic

ETC/USD, 4-Hour Chart Analysis

Ethereum Classic continues to be very volatile and range-bound, and the coin is in a relatively stronger position compared to the other majors, trading well above the key $13-$13.50 zone. That said, the short-term setup is still bearish, and traders shouldn’t enter new positions here. Further support is found near $16, $14.50, and $11, while resistance is ahead at $18.

Monero

XMR/USD, 4-Hour Chart Analysis

Monero experienced wild counter-trend rallies after its structural break-down, similarly to Dash, but as the coin failed to recapture key resistance zones, the downtrend remains intact. Now, XMR is back near the June low, and a test of the lows, and even new lows are likely in the coming weeks, so traders and investors should stay away from the coin. Support is still found near $110 and $80, while resistance is ahead at $125, $150, and $175.

NEO

NEO/USDT, 4-Hour Chart Analysis

The strong bounce in NEO also fizzled out, and the coin drifted back towards the June lows, together with the other relatively weak coins, confirming the segment-wide downtrend. Now, a move to $25 is likely even if a reversal is close, and traders and investors should stay away from entering new positions here. Primary support is found near $2650, while resistance is ahead at $30 and $34.

IOTA

IOTA/USD, 4-Hour Chart Analysis

IOTA is stuck in a strong downtrend, and the coin is trading right at the June low, risking a structural break-down and a long-term sell signal. Barring a quick reversal, a move to $0.75 is likely, with further levels at $0.64, and $0.48, and resistance ahead at $1, $1.1, and $1.2.

EOS

EOS/USD, 4-Hour Chart Analysis

EOS is hovering above the key $6.50-$7 zone, still showing long-term technical strength, but a move below that zone would be a bearish sing, and the recent short-term relative weakness is suspicious. Traders should still not enter new positions here, while investors should hold on to their coins, with further support found at $4.50, and resistance being ahead near $9, $10, and $12.

Featured image from Shutterstock

Disclaimer:  The analyst owns cryptocurrencies. He holds investment positions in the coins, but doesn’t engage in short-term or day-trading, nor does he hold short positions on any of the coins.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 316 rated postsTrader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.




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Altcoins

Crypto Psycho: Fear Could Be Our BFF

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Crypto prices continue to confuse.  For all the logic related to supply and demand, the reality these days continues to be that prices are being determined by emotion.  

The fundamental news these days is mixed. For example, take todays mention of Bitmain, one of the most valuable cryptocurrency companies, is expecting a September filing of an IPO for as much as $18 billion. That would eclipse even Facebook back in 2012.  The buzz swirling around Bitmain is about more than just crypto. Even so, $18 billion makes a loud and positive statement about investor interest.

On the other side of the digital coin, we have declarations from guys like Ken Bianco, who happens to be part of the US Treasury Office of Terrorism and Financial Intelligence.  Last week he spoke in threatening terms of how the US intends to enforce its AML/KYC regulations virtually everywhere in the world. If this sounds a little bit like an infamous German gentleman with an odd looking mustache, you have your history right.

In between these two extremes, of course, there has been lots of information each day that correlates closely with theoretical supply and demand for crypto, none of which has made a bit of difference as crypto prices continue to tumble.

Nevertheless, an objective point of view holds that there is a disconnect between what is happening in reality and crypto prices.

So unlike last year when prices were rising for no other reason than the fear of missing out (FOMO), today they are falling in the face of the fear of losing all (FOLA).  Maybe it’s fear that is the key to the future.

FOLA Could Be Our Friend

On many occasions we have mentioned how important traditional investors have used relative value.  We continue to believe that global stock and bond markets are overvalued using metrics like price earnings ratios and other financial measures.  While quantitatively speaking, this point is absolutely right, it hasn’t resonated. Since the beginning of the year, for example, investors in the Nasdaq Composite has enjoyed a 13% gain.

This gain comes even though Facebook, the fourth biggest stock in the cap-weighted Nasdaq Composite, has been a dud.  By comparison, over the exact time last year investors in the Nasdaq Composite experienced a 12% gain on the way to a bountiful 25% full year return. Overall, these folks have had very little reason to be unhappy, or fearful.

Tipping Point Could Come From Trump

Credit Datatrek for keeping a thumb on the pulse of the outside world.  Here are some insights from a recent poll on the fears of institutional money managers.  The two most important issues in late March were: unpredictable political events in Washington DC and Trade/tariff disagreements between the US and China.  Some 70% of respondents were very concerned or somewhat concerned about these issues.

Since then, things have only become more critical.  Washington’s confrontational foreign relations strategy is shaking global currency exchange markets.  In the last two weeks the Russian Ruble has lost 12% against the US Dollar. At the same time the US Dollar has increased over 40% against the Turkish Lira.  

While it can be argued that Turkey is of little importance to the global monetary system, Russia is not. Turkey plays a key role in the Middle East and any instability in that area is enough to strike investor fear that is reflected in energy, inflation and currency markets.

In earlier times, this scenario pointed investors in the direction of gold.  This is not happening. At the time of this writing, gold had just broken through $1,200 having fallen 8% this year.  In the face of the Turkish situation, this signals a loss in confidence for gold in a region of the world with a historic close connection to the metal.

Only Theory So Far  

Now if a strong correction were to take place in stock prices or an equally strong rally in crypto, there would be evidence of investors taking advantage of the relative value here. Unfortunately, at this moment that is not taking place. Bitcoin prices are down marginally but sellers continue to pound most altcoins. Until this changes, crypto prices are being driven down by FOLA.

Featured image courtesy of Shutterstock. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.4 stars on average, based on 95 rated postsJames Waggoner is a veteran Wall Street analyst and hedge fund manager who has spent the past few years researching the fintech possibilities of cryptocurrencies. He has a special passion for writing about the future of crypto.




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Analysis

Crypto Update: Ethereum Plunges Below $300 as Bitcoin Fails at $6500

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Despite a weak bounce during the weekend, the cryptocurrency segment continues to trade under heavy selling pressure, with the top altcoins till underperforming Bitcoin. Ethereum is the most obvious laggard, and it fell below the $300 level today, hitting yet another 9-month low and extending the structural bear market with another swing low.

Almost all of the majors are below or near their recent lows, but Bitcoin continues to show relative strength, and a few of the recently weak coins, notably Monero and Litecoin, are trading slightly above their swing lows. The other most important bearish currency, Ripple is also trading at new lows, and with that in mind, we remain defensive on the coins, as despite the deeply oversold momentum readings, there is still no sign of a developing leadership in the segment.

ETH/USD, 4-Hour Chart Analysis

All eyes are still on Ethereum, as the second largest coin is pushed lower relentlessly ever since its break-down below the $400 level last week. The coin continued to lead the way lower so far today, and with the break below the $300 level, the market cap of Ethereum is now just $30 billion, while the total value of the market is close to $200 billion again. The coin is now just above the $275-$280 support zone and it remains on sell signals on both time-frames, with resistance ahead at $335 and $360.

BTC/USD, 4-Hour Chart Analysis

With still no signs of even a short-term bottom in altcoins, Bitcoin is still the only hope for crypto bulls, as the coin continues to clearly hold above the crucial $5850 level. BTC is also trading above the weekend lows, even though it failed at the $6500 level during the bounce and it is now back below the $6275 support.

While the short-term downtrend is still intact and the sell signal is in place, today’s strength could be a start of a trend change, should the coin maintain its resilience. Further resistance is still ahead at $6750 and $7000, while initial support is at $6000, with the next major support zone below $5850 found between $5000 and $5100.

Sellers Still in Control but First Signs of Exhaustion Appear

LTC/USD, 4-Hour Chart Analysis

Although the bearish trend in altcoins is still very strong, and most of the relatively weak majors are also confirming today’s break-down, Litecoin is slightly outperforming the likes of Dash, NEO, and IOTA. While the current relative stability is still no reason to buy the coin, and the short-term sell signal remains intact, further signs of strength would be positive for the whole segment.

XRP/USDT, 4-Hour Chart Analysis

Ripple’s technical situation is still dire, as the coin failed to hold up above $0.30, with no signs of a bottom despite the strong support in the $0.30-$0.32 zone, and the deeply oversold momentum readings. Also today, XRP plunged below its previous low, and it’s now trading just above $0.28. The next major support zone is found near $0.26, and for the sell signals on both time-frames are intact.

Featured image from Shutterstock

Disclaimer:  The analyst owns cryptocurrencies. He holds investment positions in the coins, but doesn’t engage in short-term or day-trading, nor does he hold short positions on any of the coins.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 316 rated postsTrader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.




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Analysis

Crypto Update: Tron/Ethereum Ready for Bottom Pickers

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TRON/Ethereum (TRX/ETH) caught fire and the attention of crypto enthusiasts earlier this year. The pair opened 2018 with a bang as it took out resistance of 0.000065 and ignited a parabolic run that saw TRX/ETH move as high as 0.00032 on January 5. In less than a week, the market grew by almost 400%!

As expected, the surge was met with profit-taking. Since then, TRX/ETH has been consolidating. However, it appears that the eight-month consolidation is coming to an end. In this article, we reveal why TRX/ETH looks ready for both, bottom picking and breakout trading.  

Tron/ Ethereum Ripe for Bottom Picking

In technical analysis, resistance turn into support levels when breached. In the case of TRX/ETH, the pair has taken out 0.000065 twice this year. The first one was on January 1 and the second was on March 20. Based on this alone, we can expect demand to increase when the pair touches this level.

Daily chart of TRX/ETH

On top of that, we can also see the pair’s long-term support converging at 0.000065. This confirms the idea that 0.000065 is an area where demand exceeds supply.

If the converging trend lines are not enough to convince you that a bounce is at play, take a quick look at the technical indicators. We can see bullish divergences on the RSI and Stochastics. This tells us that TRX/ETH is gaining bullish momentum even though the price is still falling.

Ready for Breakout Trading

From a long-term perspective, TRX/ETH is trading inside a large symmetrical triangle. This pattern is visible in both the daily and weekly charts.

Symmetrical triangle pattern

With a strong case for a rally once the market touches 0.000065 we can expect TRX/ETH to break out of the symmetrical triangle formation. That should signal the end of the consolidation period and kickstart a strong bull run.  

Projected Move

If TRX/ETH breaks out of the symmetrical triangle pattern, then we can expect the pair to skyrocket.

The top end of the current symmetrical triangle is the market’s strongest resistance. It’s so strong that it has kept TRX/ETH bearish for over eight months. If bulls take that out, they’ll be set to come close to the all-time high of 0.00032.

Megaphone pattern

That’s because the only real resistance left is the one that’s trending upwards. As you can see on the chart, the pair is also trading inside a large bullish broadening wedge or megaphone pattern. The top end of this pattern can get TRX/ETH real close to 0.00032.

Bottom Line

TRX/ETH has been bearish for the last eight months. Nevertheless, that period seems to be almost over as the pair looks ready to welcome the return of bottom pickers and breakout traders.

Featured image courtesy of Shutterstock. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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3.6 stars on average, based on 222 rated postsKiril is a financial professional with 4+ years of experience in financial writing, analysis and product ownership. He has passed all three CFA exams on first attempt and has a bachelor's degree with a specialty in finance. Kiril’s current focus is on cryptocurrencies and ETFs, as he does his own crypto research and is the subject matter expert at ETFdb.com. He also has his personal website, InvestorAcademy.org where he teaches people about the basics of investing. His ultimate goal is to help people with limited knowledge of finance and investments to create investment portfolios easily, and in line with their unique circumstances.




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